How Job Satisfaction Benefits the Company (Explained)

How Job Satisfaction Benefits the CompanyJob satisfaction is a result of an employee’s perception of how well their job provides those things that are viewed as important. High employee job satisfaction benefits the company as it leads to improving productivity, decreased turnover, and less job stress.

It is generally recognized in the organizational behavior field that job satisfaction is the most important and frequently studied attitude.

At large, organizational performance seems to be the single most important aspect of an organization.

Research has concluded that there is a relationship between job satisfaction and performance of the employees. There are two basic views of satisfaction and performance, and they are inverted to one another.

One believes that satisfaction leads to performance, while the other believes performance leads to satisfaction.

In effect, we are saying if someone is happy with their job they will perform better, but to be satisfied, they have to perform in their job to get that satisfaction.

High job satisfaction may lead to improving productivity, decreased turnover, and improve attendance, reduce accidents, less job stress and less unionization.

If employees feel that their jobs are fun and interesting, they will be more willing to give extra effort to work for the benefit of the whole organization.

Job Satisfaction and Productivity

A sophisticated meta-analysis conducted by Tim Judge and his colleagues on 312 samples shows a much stronger relationship between employee job satisfaction and performance.

Research evidence indicates that satisfaction may not necessarily lead to individual performance improvement but does lead to departmental and organizational level improvement.

The meta-analysis found that when satisfaction is defined and measured by employee engagement, there is a significant relationship with performance outcomes of productivity, customer satisfaction, and even profits.

An employee who is a poor performer will get fewer rewards and will be less satisfied with his job experience.

However, the saying that “A happy worker is a productive worker” is not always wrong. If we think of the organization as a whole, the above saying is also applicable.

When satisfaction and productivity data are gathered for the organization as a whole, rather than the individual level, we find that organizations with more satisfied employees tend to be more effective than organizations with fewer satisfied employees.

So, it may also be said that “A happy organization is a productive organization.” If people receive rewards that have both intrinsic and extrinsic value and they feel that their rewards are equitable, they will be satisfied and this will lead to greater job performance.

According to Lawler and Peter, “productivity leads to job satisfaction because performance attracts rewards and if we accept it according to equity theory, rewards result in job satisfaction.

Job Satisfaction and Employee Turnover

The high rate of turnover has always been a great problem for many organizations.

According to Sattler and Mullen, generally, the more productive people are, the more satisfied they tend to be and when employees feel satisfied they are less likely to leave the organization.

Unlike the relationship between satisfaction and performance, research has concluded a moderate relationship between job satisfaction and turnover.

High employee turnover is a matter of concern for the management as it disrupts the normal operations and continuous replacement of employees who leave die organization is costly and technically undesirable.

Much research has been demonstrated that workers who have relatively low levels of job satisfaction are the most likely to quit their jobs and that organizational units with the lowest average satisfaction levels tend to have the highest turnover rates.

Though high job satisfaction in itself cannot keep the turnover low; but considerable job dissatisfaction will increase employee turnover.

On an overall basis, we can say that there is an important role played by job satisfaction in employee turnover.

Job Satisfaction and Absenteeism

It has been conclusively proved that there is an inverse relationship between job satisfaction and absenteeism.

It is important to remember that high job satisfaction will result in low absenteeism; low satisfaction is likely to bring high absenteeism. Less satisfied employees are more likely to be absent from work due to avoidable reasons.

This is known as voluntary absenteeism as against unavoidable absenteeism which is due to illness or other emergency reasons. Management must be concerned with voluntary absenteeism because it is related to job satisfaction.

It Reduces the Level of Unionization

It has been proved that satisfied employees are generally not interested in unions and they do not perceive them as necessary. Job satisfaction has proved to be the major cause of unionization

The employees join the unions because they feel that individually they are unable to influence changes which would eliminate the causes of job dissatisfaction.

The level of union activities is related to the level of job dissatisfaction. A low level of dissatisfaction results in only grievances while higher levels of dissatisfaction will result in employee strikes.

Job Satisfaction Reduces the Level of Accidents

When people are. dissatisfied with their jobs, company, and supervisors, they are more prone to experience accidents. An underlying reason for this is that dissatisfaction lakes one’s attention away from the task at hand and leads directly to accidents.

A satisfied worker will always be careful and attentive towards his job, and the chances of accidents will be less. Here, we are discussing the avoidable accidents and not the unavoidable ones.

It Helps to Create a Better Working Environment

When employees are enjoying a higher degree of job satisfaction they tend to be more helpful and friendly to their colleagues at work. This helps to promote teamwork where sharing of information and knowledge is enhanced.

Moreover, studies have shown that job satisfaction among employees may lead to a better and safer working environment with lesser negative conflicts.

Employee Satisfaction Can Lead to Customer Satisfaction

Employees that are happy in their work not only stay with the company and boost productivity; they also can help to maintain a happy customer base as well.

Numerous studies have been carried out to look at the link between customer and employee satisfaction. Many of them have shown a relationship between employee satisfaction, customer satisfaction, and profitability.

Similarly, Vilares and Cohelo found that perceived employee satisfaction, perceived employee loyalty, and perceived employee commitment had a sizable impact on perceived product quality and perceived service quality.

In a service organization, customer retention and defection are highly dependent on how front-line employees deal with customers.

Satisfied employees are more likely to be friendly, upbeat, and responsive which customers appreciate.

And because satisfied employees are less prone to turnover, customers are more likely to encounter familiar faces and receive experienced service.

These qualities build customer satisfaction and loyalty. In other words, when, the staff is happy, the customers will be too.

At the heart of these endeavors is a strong belief that today’s employee satisfaction, loyalty and commitment influence tomorrow’s customer satisfaction, loyalty and commitment; and ultimately, the organization will earn more profit.


The performance of an organization is often measured by growth. Satisfied employees are more likely to be loyal to the organization.

However, what makes an employee satisfied is still a question.

Many factors such as their satisfaction of work, social satisfaction, and rewards are only a few. In most models, the primary focus is on a reward structure that motivates employees.

As a result, the organization reached growth goals.

To conclude, we can say that job satisfaction results from the employee’s perception that the job content and context provide what an employee values in the work situation.

Organizationally speaking, a high level of job satisfaction reflects a highly favorable organizational climate resulting in attracting and retaining better workers.

So, it does not take a lot of thought to realize that if someone has a high level of job satisfaction, they will probably have a high level of performance.

On the other hand, if someone is not satisfied with their job, they probably will not have the same high level of performance.

The relationship between job satisfaction and job performance may vary based on a variety of factors, including culture.


Finally, an improved organizational model could provide a better connection for organizations between job and organizational attitude and organizational performance.

Personal goal facilitation through work offers a promising source of insight into job attitudes and well-being.

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